Daewoo Logistics to lose millions after Madagascar coup

By Ben Hancock

SEOUL, March 19 (Yonhap) -- Daewoo Logistics said Thursday it stands to lose millions of U.S. dollars after Madagascar's new military-backed ruler canceled a massive farm project it has been pushing in the Indian Ocean nation.

The South Korean shipping company had sought to develop an area half the size of
Belgium for 99 years in return for infrastructure and labor investment.
Populist Malagasy leader Andry Rajoelina, who seized power Tuesday with the
backing of the country's military, rejected the Daewoo project as
unconstitutional after ousting President Marc Ravolomanana.
"Already we have invested not a small amount into Madagascar," said Shin
Dong-hyun, who oversees the deal for Daewoo. "We are just waiting and watching
this situation to see whether to retreat."
Foreign media have said the farm project was a key issue behind Madagascar's
political unrest, a charge Daewoo denies. But the fact that Rajoelina wasted no
time in calling off the deal hints at how salient the issue is to the Malagasy
people.
"In the constitution, it is stipulated that Madagascar's land is neither for sale
nor for rent, so the agreement with Daewoo is canceled," Rajoelina told
reporters, according to news reports.
Shin said Daewoo has had official contact with Madagascar since Rajoelina came to
power but would not elaborate. He said the company intends to discuss the matter
with the new regime.
Shin would not give specifics, but said his company has already spent millions
of dollars setting up Madagascar Future Enterprises and bankrolling 30 employees
there. He added that Daewoo also spent a large amount to conduct a land survey
of almost 2 million hectares.
Shin expressed frustration at the volatility in Madagascar and questioned the
viability of investing in Africa.